Pitney Bowes 2012 Annual Report Download - page 22

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4
Credit Policies
We establish credit approval limits and procedures based on the credit quality of the client and the type of product or service provided
to control risk in extending credit to clients. In addition, we utilize an automatic approval program for certain leases. This program is
designed to facilitate low dollar transactions by utilizing historical payment patterns and losses realized for clients with common credit
characteristics. The program defines the criteria under which we will accept a client without performing a more detailed credit
investigation, such as maximum equipment cost, a client's time in business and payment experience.
We closely monitor the portfolio by analyzing industry sectors and delinquency trends by product line, industry and client to ensure
reserve levels and credit policies reflect current trends. Management continues to closely monitor credit lines, collection resources and
revise credit policies as necessary to be more selective in managing the portfolio.
Competition
We are a major provider of products and services in the majority of our business segments and our long experience, reputation for product
quality and our sales and support service organizations are important factors in influencing client choices. All of our segments face
competition from a number of companies. In particular, we face competition from companies that offer products and services as alternative
means of message communications, including from postage meter and mailing machine suppliers for new placements of mailing equipment
and from companies that offer alternatives to our mailing products, services and software. We also face competition from companies
looking to digitize mail, as well as those providing on-line payment services. We offer a variety of finance and payment offerings to our
clients to finance their equipment purchases through our captive financing business. Our financing operations face competition, in varying
degrees, from large, diversified financial institutions, including leasing companies, commercial finance companies and commercial banks,
to small, specialized firms. We are a major provider of facilities management and document management services to the corporate,
financial services, professional services and government markets and compete against national, regional and local firms offering similar
services.
Research, Development and Intellectual Property
We invest in research and development programs to develop new products and service offerings. As a result of our research and development
efforts, we have been awarded a number of patents with respect to several of our existing and planned products. We do not believe our
businesses are materially dependent on any one patent or license or any group of related patents or group of related licenses. Our
expenditures for research and development were $137 million, $149 million and $156 million in 2012, 2011 and 2010, respectively.
Material Suppliers
We depend on third-party suppliers for a variety of services, components, supplies and a large portion of our product manufacturing. In
certain instances, we rely on single sourced or limited sourced suppliers around the world because the relationship is advantageous due
to quality, price, or there are no alternative sources. We have not historically experienced shortages in services, components or products
and believe that our available sources for materials, components, services and supplies are adequate.
Regulatory Matters
We are subject to the regulations of postal authorities worldwide related to product specifications and business practices involving our
postage meters. From time to time, we will work with these governing bodies to help in the enhancement and growth of mail and the
mail channel.
Employees and Employee Relations
At December 31, 2012, we employed approximately 20,800 persons in the U.S. and 6,600 persons outside the U.S. The large majority
of our employees are not represented by any labor union and we believe that our current relations with employees are good. Management
follows the policy of keeping employees informed of decisions and encourages and implements employee suggestions whenever
practicable.
Executive Officers
See Part III, Item 10. "Directors, Executive Officers and Corporate Governance" of this Form 10-K for information about Executive
Officers of the Registrant.